Michigan

Spark's state funds may end

"Michigan businesses are desperate for funding right now and it's hard to get."- Jim Epolito, president and chief executive officer of the Michigan Economic Development Corporation

By TINA REEDThe Ann Arbor News

A recommended change to the 21st Century Jobs Fund rules would prevent state money from going to local economic development group Spark in future funding rounds.

Under the new policy, state awards would be limited to businesses directly involved in commercialization, disqualifying support services - including the Michigan Pre-Seed Fund run by Spark, the Ann Arbor area economic development organization. Spark previously had received money from the state.

"Michigan businesses are desperate for funding right now and it's hard to get," Epolito said. "We have to make sure we're getting this directly to the businesses that can make the greatest impact."

The 21st Century Jobs fund is part of Governor Jennifer Granholm's plan to diversify Michigan's economy by awarding grants and loans to high-tech startups using tobacco settlement money.

Ann Arbor-based Biotechnology Business Consultants, which has a contract through 2009 with the state's 11 SmartZones to help small businesses develop funding strategies, could also be affected by the possible fund change, said partner Michael Kurek.

The Michigan Pre-Seed Fund last year gave at least $6 million - about half of it in Washtenaw County - to new companies attempting to commercialize technology, said Mike Finney, chief executive officer of Spark. On Wednesday, Finney told the Local Development Finance Authority, which helps fund Spark, to expect the drop in funding unless an alternative funding source is found.

"We're concerned with getting money directly into the hands of companies doing the commercialization," Finney said. "We're looking at other potential sources (of funding) and are working with the MEDC to find a way to continue thePre-Seed fund."

An upcoming 21st Century Jobs Fund is in development. A timeline, including request-for-proposal details, could be announced as soon as the MEDC's Strategic Economic Investment and Commercialization board's upcoming meeting on Feb. 25 concludes, Epolito said.

Last week, the state also announced a mandated version of the Emerging Technologies Fund to match federal Small Business Innovation Research and Small Business Technology Transfer research dollars promised to Michigan businesses.

That 21st Century Jobs Funding requires $1.4 million be administered to technology businesses commercializing ideas that could create jobs in one of the four designated sectors: life sciences, alternative energy, homeland security and advanced automotive, manufacturing and materials. Eligible small high-tech businesses, matching 25 percent up to $25,000 for companies in Phase I research and up to $125,000 for Phase II research.